Procurement of frequency containment reserves from annual market 2024
Fingrid has made a procurement decision on the annual market reserve quantities of frequency containment reserves for the year 2024. Decision is based on the public tender held in September. The growing needs of electricity system reserves and the changed market situation have been reflected in the increased prices of the reserve market.
Compared to the 2023 annual market procurement, the prices of Frequency Containment Reserve for Normal Operation (FCR-N) and the Frequency Containment Reserve for Disturbances Upwards (FCR-D up) product will increase, but the procurement quantities will remain almost unchanged in 2024. On the other hand, the 2024 acquisition price of the frequency containment reserve for disturbances down-regulation (FCR-D down) product will decrease slightly, but the quantity will increase significantly compared to 2023. Increasing the annual market quantity of the FCR-D down in the annual market is meaningful, as the total purchase quantity will also be increased in the future.
As a result of this year's tender, Fingrid will have at most the following amounts of annual market capacity available for 2024:
- 67.5 MW of frequency containment reserve for normal operation (FCR-N)
- 347.8 MW of the up-regulation product of the frequency containment reserve for disturbances (FCR-D up).
- 245.2 MW of the down-regulation product of the frequency containment reserve for disturbances (FCR-D down).
The annual market prices for 2024 are:
- Frequency containment reserve for normal operation (FCR-N): €25.39/MW,h
- Up-regulation product of the frequency containment reserve for disturbances (FCR-D up): €4.00/MW,h
- Down-regulation product of the frequency containment reserve for disturbances: €9.50/MW,h.
The annual market capacity compensation to be paid to reserve suppliers is determined on the basis of a tender according to the most expensive accepted offer (marginal price) separately for each reserve product. The total value of annual market contracts is approximately 37.3 million EUR.
Reserve suppliers who were not selected in the FCR annual market competition can sell their reserve capacity on the hourly market. Participation in the hourly market is possible at any time of the year. The market information for frequency containement reserves can be found here and the contractual terms of reserve suppliers here.
Taneli Leiskamo, Fingrid Oyj, tel. +358 30 395 5240
Email addresses are in the format email@example.com.
Fingrid selects the reserve capacity to be acquired from the annual market based on a separately organized tender, for which the reserve supplier can offer reserve capacity located in Finland. Reserve suppliers participating in the annual market confirm the amount of reserve capacity they maintain every day for the following day.
In addition to the annual market, Fingrid acquires frequency stabilization reserve capacity through daily acquisition from the hourly market in Finland and other Nordic countries as well as Estonia. The procurement is carried out minimizing total costs, but in such a way that the total procurement covers the reserve obligations of Fingrid.
Fingrid's obligations for frequency stabilization reserves in 2024 are as follows:
- Frequency Containment Reserve for Normal Operation (FCR-N) 122 MW
- Frequency Containment Reserve for Disturbances Upwards (FCR-D up) at most 295 MW
- Frequency Containment Reserve for Disturbances Downwards (FCR-D down) at most 285 MW MW1.
1The procurement of the frequency containment disturbance reserve downregulation product (FCR-D down) began on 1 January 2022, and its procurement amount will be gradually increased towards the full obligation. Currently (Q4/2023), the procurement amount is 230 MW.
The amount of required fault reserves depends on the size of the fault to be measured in the Nordic electricity system. In the case of disturbances, the largest possible individual power change varies depending on the operating situation of the electrical system, but typically the maximum values of disturbance reserves shown above have been needed in most hours. The dimensioning quantities of the frequency stabilization reserves are filled for all hours of the year.
The costs of the reserves are allocated to the pricing of Fingrid's services on a causal basis. The costs of the frequency containment operation reserve for normal operation are covered by the balance service fees paid by the balance responsible parties, and the costs of the frequency containment disturbance reserve are covered by the main grid service fees paid by Fingrid's customers.